Question
Discuss the Factors affecting the appropriate level of net working capital for a firm b. Shaw Corporation is considering a plant expansion that will increase
Discuss the Factors affecting the appropriate level of net working capital for a firm b. Shaw Corporation is considering a plant expansion that will increase its sales and net income. The following data represent management's estimate of the impact the proposal will have: Current Proposal Cash $100,000 $120,000 Accounts payable 350,000 430,000 Accounts receivable 400,000 500,000 Inventory 380,000 460,000 Marketable securities 200,000 200,000 Mortgage payable (current) 175,000 325,000 Fixed assets 2,500,000 3,500,000 Required: What is the effect of the plant expansion on Shaw's net working capital will be?
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